News Summary 11-24-09
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Today's news summary highlights several important economic datapoints. The revision of third quarter GDP carried significant weight this morning, but despite the deceleration of growth, GDP was reported in line with expectations. This news summary also includes analytical color on Home Prices, Consumer Confidence, Weekly Same-Store Sales, Investor Sentiment and Hewlett-Packard's results.
News Summary 11-24-09GDP Revision
Third quarter GDP faced its first revision today, and the result was a reduction from 3.5% growth to 2.8%. That's not the best news for an economy that has recently raised concerns again, however, the result was right in line with the economists' consensus view. Still, the market drifted lower through midday on GDP and other data detailed below. Look for our followup article on GDP that is sure to help your understanding of the report.
Very little change ensued today in the Conference Board's Consumer Confidence Index. No change, however, is no longer good news, especially after the index had fallen in the prior month's checkup.
The Confidence Index improved slightly to 49.5 in November, up from 48.7 in October. The October reading was down sharply though from August's stronger take on consumers, which read 54.5. The Expectations Index, at heightened importance now due to consumers' poor view of the current situation, improved only slightly to 68.5, from 67.0 in October.
State Street (NYSE: STT) reports monthly on Global Investor Confidence, and bases its index on held risk within institutional portfolios. Investor Confidence dropped for the third month in a row, and is now well off of the summer peak of 122.8, sitting currently at 100.8. The 100 point mark represents neutrality on the part of institutional investor fund flows toward/away from risky assets, so we are now at the threshold of trouble.
The S&P Case Shiller Home Price Index showed home price improvement in both its 10-City and 20-City Composite Indexes. However, the gains were not as substantial as in recent months, or rather the pace of gain is decelerating significantly. It seems home prices have also been buoyed by the First-Time Homebuyer Tax Credit. Case Shiller's 20-City Composite improved for the fifth straight month, but the pace of improvement was down to 0.33% in September, from 1.21% in August.
The FHFA Home Price Index was also published today. FHFA's take on September also produced no change from August prices. FHFA's data is limited by the ceiling amount for conforming loans purchased by GSEs: Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).
The ICSC's regular report on weekly same-store sales showed no change on a week-to-week basis and a strong 3.3% gain over the easy comp from a year ago. We told you about this trend in our copy, "This Week."
FOMC Meeting Minutes
The Dow rose after the Fed published its November FOMC meeting minutes, but still closed the day lower than it opened it. We did not get a chance to review the minutes, and so offer a link to the data here for you to peruse.
Corporate News Drivers
Hewlett-Packard (NYSE: HPQ) reported results last evening, and the shares traded 1.6% lower Tuesday as a result. HP offered preliminary results ahead of this report though, and so its nice expectations beating was less flavorful given the time passage. The company exceeded analysts' expectations on both the revenue and EPS lines, but revenues declined and so gains came on margin improvement (on cost cuts). In its PC business, however, prices are eroding as competition is getting to be cutthroat for slim pickings among poor consumers. Still, demand for HP's goods is coming from China and American consumers, as businesses continue to exhibit cautious spending traits. The company's acquisition of EDS has also helped smooth out a traditionally cyclical revenue stream, allowing HPQ to post growth even now.
Tuesday's EPS reports included Allied Healthcare (Nasdaq: AHCI), American Eagle Outfitters (NYSE: AEO), American Italian Pasta (Nasdaq: AIPC), American Woodmark (Nasdaq: AMWD), Amtech Systems (Nasdaq: ASYS), Avanir Pharmaceuticals (Nasdaq: AVNR), Bank of Montreal (NYSE: BMO), Barnes & Noble (NYSE: BKS), Blue Coat Systems (Nasdaq: BCSI), Borders Group (NYSE: BGP), Brown Shoe (NYSE: BWS), ChinaEdu (Nasdaq: CEDU), Coldwater Creek (Nasdaq: CWTR), Cracker Barrel Old Country Store (Nasdaq: CBRL), Daktronics (Nasdaq: DAKT), dELiA*s (Nasdaq: DLIA), Dollar Tree Stores (Nasdaq: DLTR), DSW (NYSE: DSW), Eaton Vance (NYSE: EV), Fred's (Nasdaq: FRED), Genesco (NYSE: GCO), GeoPharma (Nasdaq: GORX), Giant Interactive Group (NYSE: GA), H.J. Heinz (NYSE: HNZ), Hillenbrand (NYSE: HI), Hormel Foods (NYSE: HRL), Industrie Natuzzi (NYSE: NTZ), J. Crew Group (NYSE: JCG), Medtronic (NYSE: MDT), Netezza (NYSE: NZ), QAD (Nasdaq: QADI), Signet Jewelers (NYSE: SIG), TIVO Inc. (Nasdaq: TIVO), Warner Music Group (NYSE: WMG), Wimm-Bill-Dann Foods (NYSE: WBD) and WSP Holdings (NYSE: WH). That's all for today's news summary...
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